Berenberg is less optimistic about the stock and is readjusting downwards his opinion. The broker's analyst Luisa Hector is now Neutral. The target price is lowered from CHF 320 to CHF 290.
Tuesday, September 5, 2023
Johnson & johnson: Guggenheim reduced target price of USD 169.
maintains a neutral recommendation
https://www.marketscreener.com/quote/stock/JOHNSON-JOHNSON-4832/
Biogen inc: Morgan Stanley target price raised from USD 363 to USD 381.
Maintains an overweight/attractive rating.
US banks hold $3.3 trillion cash amid banking crisis, slowdown worries
U.S. lenders are holding onto large piles of cash as insurance against a slowing economy, continuing deposit outflows and looming tougher liquidity rules that could particularly impact mid-sized banks.
The buildup is another example of a risk-averse approach from a sector still trying to regain its footing after a string of springtime bank failures, one which could result in restrained lending.
"This is a logical response to a slowing economy and particularly to a scenario, where you're seeing deposit outflows and you need to conserve cash," said David Fanger, senior vice president at Moody's rating agency.
"What happened in March was a big wake-up call."
The collapse of Silicon Valley Bank and Signature Bank in March triggered massive deposit withdrawals and placed renewed focus on lenders' financial health. More recently, the sector was hit by ratings downgrades when S&P last month cut credit ratings and revised its outlook for multiple U.S. banks, following a similar move by Moody's.
Overall U.S. banks' cash assets were $3.26 trillion as of Aug. 23, up 5.4% from the end of 2022. That was well above typical pre-pandemic levels, though down from the weeks immediately following the bank failures in March, Federal Reserve data shows.
Cash assets at small and mid-sized lenders are up 12% compared with the start of the year; at the nation's top 25 banks, cash holdings are up about 2.9%.
Large banks including JPMorgan and Bank of America declined to comment beyond the disclosures, but pointed to their executives' comments about reasons such as the Fed shrinking its balance sheet, falling deposits and higher short-term rates.
The SVB failure triggered a sudden dash for cash at banks, which within two weeks had bulked up cash assets to $3.49 trillion, the highest level since April 2022. That has pulled back since then, but is still almost twice as high as pre-pandemic.
Banks need higher cash levels to meet liabilities as customers withdraw deposits, and to offset risks such as loan losses as the Federal Reserve keeps interest rates high to cool economic growth and inflation.
"A lot of banks are taking steps to reduce risk and strengthen their balance sheets," said Brendan Browne, S&P's senior credit analyst for financial institutions.
Regional banks are shifting more "earning assets," such as those from lending activities, into cash or short-term securities, said Manan Gosalia, an analyst at Morgan Stanley, who covers regional banks.
"As banks see further pressure on deposit costs, and as they hold higher levels of liquidity, we expect loan growth will continue to slow as we get to the end of this year," he said.
S&P forecasts 2% loan growth this year, after an almost 9% gain last year.
STRICTER RULES
Mid-sized banks are also worried about upcoming regulations, analysts said.
U.S. regulators have said they will likely impose stricter capital and liquidity requirements on banks with $100 billion or more in assets.
Since March, regulatory focus has heightened, prompting banks to focus on key capabilities in liquidity and asset liability management, bankers and analysts said.
"Regulators are going to have a shorter fuse" for banks that have any gaps in managing their liquidity and the loans held on their books, said Peter Marshall, leader of EY's financial services liquidity advisory group.
The Fed's aggressive tightening since March 2022 put a lot of banks' longer-term securities under water, creating investor anxiety over the health of bank balance sheets.
Since then, banks are taking steps to boost liquidity by reducing investments in securities or selling them at a loss.
S&P estimated the value of these securities for FDIC-insured banks had more than $550 billion of unrealized losses on their available-for-sale and held-to-maturity securities as of June 30.
Bank of America said in a July presentation it sold $93 billion from the available-for-sale segment of the balance sheet in the first two quarters and added the proceeds to cash, which stood at $374 billion at the end of June, its second-quarter earnings data showed.
It further showed cash, which was deployed in money markets, was generating better returns than keeping it in low-yielding securities.
Bigger rival JPMorgan has been selling securities for the past year. It has $420 billion in cash and $990 billion of what it calls high quality liquidity assets and other unencumbered securities, it said.
"The good news is for some of these banks re-investing cash is that we have pretty high short-term rates," said Mac Sykes, portfolio manager at Gabelli Funds.
"It's definitely opportunistic and advantageous to be investing short-term securities."
BioLineRx Proposes Aphexda for Stem Cell Mobilization
Next week, on or before Sept. 9, the FDA will decide on BioLineRx’s NDA proposing Aphexda (motixafortide) as a stem cell mobilization agent for patients with multiple myeloma scheduled for autologous stem cell transplantation (ASCT).
In multiple myeloma, as in many other blood cancers, ASCT is part of the standard treatment regimen, often used alongside high-dose chemotherapy.
To eliminate the cancer cells from the body, patients with multiple myeloma are exposed to systemic aggressive treatments, including chemotherapy and whole-body radiation therapy. However, these also often end up damaging healthy stem cells. ASCT replenishes these cells and helps the body make healthy blood cells.
Before stem cells can be harvested from the body, they must first be mobilized, a process by which the stem cells are drawn into the bloodstream from the bone marrow. This is usually achieved through chemotherapy itself or with the use of colony stimulating factors (CSF).
In its NDA, BioLineRx presented data from the Phase III GENESIS trial, which assessed the effect of adding Aphexda to granulocyte-CSF on stem cell mobilization. Just one round of add-on Aphexda in a single apheresis session mobilized the optimal number of stem cells in around 90% of patients, who were then able to proceed directly to transplantation. In comparison, only 10% of patients who received granulocyte-CSF with placebo reached a similar level of stem cell mobilization.
These data suggest that Aphexda has the potential to “become the standard of care in the multiple myeloma transplant setting,” BioLineRx CEO Philip Serlin said in a statement announcing the NDA’s acceptance.
https://www.biospace.com/article/fda-action-alert-bms-outlook-and-biolinerx/
Pump Prices in US Hit Highest Seasonal Level in Over a Decade
- Gasoline costs follow oil higher despite end of summer peak
- Fuel prices raise concern over inflation, consumer confidence
Gasoline prices are now at the highest seasonal level in more than a decade even as the Labor Day holiday marked the end of the US summer driving season, sparking fears that inflation could accelerate again in a challenge to President Joe Biden’s reelection efforts.
The national average for regular gasoline stands at $3.811 a gallon, topping this time last year and marking the second-highest level in records going back to 1994 from the American Automobile Association. The move comes at a time when prices typically decline going into fall and is a u-turn after a relatively cheap summer for drivers.
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